FTX has $3.5 billion in frozen assets, Bahamas regulator says

abdelaziz Fathi

The securities regulator in the Bahamas conceded that it is holding FTX assets worth $3.5 billion based on market pricing at the time they ordered the transfer of the exchange’s holdings from its wallets into their own custody.

Sam Bankman-Fried

In a press statement Thursday evening, the SCB said it had exercised its powers as a regulator and directed the transfer of all digital assets of FTX Digital Markets, a Bahamian subsidiary of the now-defunct crypto empire.

The watchdog added that it’s holding these assets on a temporarily basis as it sought directions from the Bahamian Supreme Court to deliver them to customers and creditors, or to liquidators of the insolvency estate.

Authorities in the Bahamas — where FTX is headquartered —justified the move to take control of assets on November 12, citing “urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM.” In an interview with Vox, Bankman-Fried expressed serious disdain for regulators but said he already transferred those funds to the SCB’s custody.

The move came after the lawyer overseeing FTX’s bankruptcy said the initial conclusions show a massive mismanagement and potentially fraudulent acts. It was also expected after the appointment of a provisional liquidator followed the Bahamian securities regulator suspending FTX’s registration status and freezing its local subsidiary’s assets on November 10. The provisional liquidation is a regulatory act to safeguard all assets for the time being, as opposed to distributing the company’s assets to creditors.

The revelation also comes shortly after the US Department of Justice launched investigations into the hack that drained about $372 million out of bankrupt cryptocurrency exchange.

The mystery theft took place on November 11 shortly after the exchange and its 130 affiliated entities filed for bankruptcy. Both the hack and new probe added insult to injury of FTX, a once $32 billion crypto empire, whose founder and former CEO Sam Bankman-Fried is sued in a separate fraud case.

According to a Bloomberg report, federal prosecutors from the Justice Department’s National Cryptocurrency Enforcement and Manhattan authorities are tracking the stolen assets. Per the report, they already managed to freeze some tokens, but amount of funds frozen is described as a “fraction” of the overall amount.

At the time of the hack, some blockchain security firms documented suspicious transfers of $600 million worth of tokens from FTX, which may have been the result of a hack or theft. Hackers allegedly sent 180,000 ether (ETH) coins, worth nearly $200 million to at least a dozen digital wallets. The suspicious hack marked a new twist in a dramatic series of events as some experts claimed that some clues point to a high-level insider.

Read this next

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

“The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

<